Simplify, Clarify Regs for Improved Compliance, Firm's Survey Says

The best thing that regulators can do for financial institutions, short of issuing fewer regulations, is to make the regs simpler and compliance methodologies clearer, say respondents to a recent survey from Minneapolis-based global consulting firm Wolters Kluwer Financial Services.

According to the firm’s November Regulatory & Risk ManagementIndicator, banks and credit unions want more guidance from regulators and have grown more concerned with their own ability to manage compliance obligations and risk. Nearly 80% of respondents showed significant concerns about staying abreast of regulatory change and complying with regulator demands, compared to slightly more than 60% of respondents showing similar concern levels when the company surveyed 400-plus financial institutions in January.

In addition, the percentage of respondents showing a significant concern with their ability to manage risk across their organization rose from over 50% in January to more than 60% in the current Indicator.

The combined RESPA/TILA disclosure rule continued to top institutions concerns with the Dodd-Frank Act and Consumer Financial Protection Bureau at nearly 70%. Requirements for qualified mortgages at 66% and qualified residential mortgages at 64% were not far behind. Regulatory risk remained the top risk management concern at 64% along with asset and liability management at 40% in second place.

“Intense risk-based supervision, together with the rapid pace of regulatory change and heavy sanctions for noncompliance are creating mounting challenges for U.S. financial institutions as we head into 2014,” said Timothy Burniston, vice president and senior director of Wolters Kluwer’s Risk and Compliance Consulting Practice. “The latest Indicator shows just how increasingly difficult, resource intensive, and time consuming it is for financial institutions to get in front of regulatory change and understand their true risk picture.”